Stocks were up early on Wednesday but dipped after the tax bill was passed by the House of Representatives and will be signed into law. The Dow lost just 28-points but that was 130-points off the earlier highs. The small caps held onto some gains as they benefit the most from the tax bill, and the Transports had a big day after FedEx posted strong earnings.
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It wasn't a major sell-the news reaction to the tax bill, but it certainly slowed the momentum down so we could say that the bill has been priced in, although in the weeks to come companies may start to release guidance after they learn more details about the bill and figure out its impact on their bottom line. FedEx said they expect a $1.5 billion dollar boost to their 2018 earnings due to the bill so clearly we could see stocks continue to rally next year.
The SPY (S&P 500 / C-fund) dipped slightly lower yesterday but the large black bar shows the negative reversal we saw. The next couple of trading days are strong historically but this tax bill throws a bit of a wrench in the normal seasonality play.
The small caps / S-fund also closed below their highs but did end the day with a modest gain. That large bullish flag could be a good sign, but I am thinking right now that it may be a January breakout rather than a light volume breakout next week, but we'll see.
The Dow Transportation Index had a big day thanks to FedEx but it's still flirting with resistance.
The EAFE Index (I-fund) has pulled back sharply from the top of that large trading channel. There is some support at yesterday's lows but the bottom of the trading range is all the way down near 69.
The AGG (bonds / F-fund) was down sharply as yields continue to rise.
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
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It wasn't a major sell-the news reaction to the tax bill, but it certainly slowed the momentum down so we could say that the bill has been priced in, although in the weeks to come companies may start to release guidance after they learn more details about the bill and figure out its impact on their bottom line. FedEx said they expect a $1.5 billion dollar boost to their 2018 earnings due to the bill so clearly we could see stocks continue to rally next year.
The SPY (S&P 500 / C-fund) dipped slightly lower yesterday but the large black bar shows the negative reversal we saw. The next couple of trading days are strong historically but this tax bill throws a bit of a wrench in the normal seasonality play.
The small caps / S-fund also closed below their highs but did end the day with a modest gain. That large bullish flag could be a good sign, but I am thinking right now that it may be a January breakout rather than a light volume breakout next week, but we'll see.
The Dow Transportation Index had a big day thanks to FedEx but it's still flirting with resistance.
The EAFE Index (I-fund) has pulled back sharply from the top of that large trading channel. There is some support at yesterday's lows but the bottom of the trading range is all the way down near 69.
The AGG (bonds / F-fund) was down sharply as yields continue to rise.
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
